‘The black market now rules in Gaza’: the Canary speaks to Palestinian economic analyst Ahmed Abu Qamar

Ahmed Abu Qamar, an economic analyst in Gaza, warned of an unprecedented collapse of the Palestinian economy in the Strip, with poverty and unemployment rates reaching “catastrophic” levels and the local economy turning into a quasi-absolute black market that controls all aspects of daily life.

The ongoing Israeli assault on the Gaza Strip for over than 20 months has almost completely destroyed the economic sector, despite the obvious suffering of this sector during the long years of the Israeli blockade imposed on Gaza since 2007.

93% below the poverty line and a state of paralysis in Gaza

Abu Qamar said in exclusive comments to the Canary that the poverty rate has risen from 80% before the war to 93% currently, noting that those below the minimum wage are classified as poor. However, the situation has worsened to the point that a large proportion of poor people themselves are suffering from extreme poverty, unable to secure even the most basic necessities.

He explained that the Gaza economy contracted by 83% in 2024, according to the Palestinian Central Bureau of Statistics, a rate that represents “an unprecedented level of economic collapse” compared to the harshest years of the blockade, during which the contraction rate did not exceed 15%.

He added:

Before the war, there was a fragile but relatively organized economy. Now, the situation is closer to chaos, with the black market controlling buying and selling and the complete disappearance of the role of banks and monetary authority.

The black market rules the scene

Abu Qamar confirmed that the black market currently controls the distribution of aid and commodity prices, causing prices to fluctuate from one area to another, even within the same sector, pointing out that this situation creates widespread economic imbalance and difficulty in regulating the market.

The economist pointed out that the industrial sector in Gaza has completely lost its role, as its contribution to GDP fell from more than 20% before the blockade to 7% before the war, and currently does not exceed 2%, limited to light industries that do not keep pace with the requirements of economic development.

He added:

During the years of the blockade, Israel destroyed dozens of industrial facilities and deprived the sector of raw materials. During the ongoing war, there has been systematic destruction of industrial infrastructure, either through direct bombing or by paralyzing production due to the closure of crossings.

Decline in vital sectors across the Strip

Abu Qamar pointed out that the agricultural sector, which accounted for 11-13% of GDP, has been severely damaged, while the industrial sector contributed 7% before the war.

The service sector flourished relatively because it relied on labor rather than raw materials and the concentration of capital flows in the productive sector. He noted that the contracting and construction sector, despite restrictions, was relatively active, but has completely stopped since the outbreak of the war.

Regarding the labor market, Abu Qamar said that the unemployment rate in Gaza was 47% before the war, but it has now jumped to about 83%, given the destruction of the economic infrastructure and the lack of job opportunities, especially in the productive and service sectors.

Featured image via the Canary